Why we work and our motivation to work relates to satisfaction of both intrinsic and extrinsic elements to satisfy ours needs at work and these are different according to personal circumstances. Clearly, financial reward is paramount if we have no other sources of income and there have been some stunning examples lately of financial rewards. For example, Facebook’s financial rewards to its employees! The company granted about $796 million in restricted stock units to employees.
NON-FINANCIAL INTRINSIC ELEMENTS THAT MOTIVATE US TO WORK
But people want more from work than money and it is argued that incentive plans should play to the intrinsic need of the employee rather than some external driver. For example, software engineers are motivated by working with the latest technology in meaningful projects where they can gain the respect of their peers (see http://www.wisebread.com/incentive-plans-always-go-awry). Common non-financial intrinsic rewards cited by people to make them more motivated at work include:
- Personal achievement opportunities, such as gaining personal fulfilment for jobs well done and feeling as if they are contributing to something larger than themselves and to achieve personal missions they accomplish through meaningful work.
- Social elements, such as the camaraderie and interaction with customers and co-workers
- Career opportunities for advancement and to accomplish life career goal
- Interest in the work itself, perhaps making something of value to customers or serving customers
- Opportunities for personal growth though learning, training and development as well as through increased responsibilities at work.
- The giving of personal time and appreciative attention from the supervisor is one of the most cited by staff as most rewarding and motivational for them at work. We want to be valued for a job well done by those we hold in high esteem. Being patronised or demeaned is one of the greatest turnoffs – and it only needs to happen once. There is much research done on those ‘small moments’ which negatively impact on a working relationship.
Motivation is individual and diverse and sometimes having a positive experience of one of those things can be offset by having a negative experience in another area.
For example, if someone has five of those motivational factors on the above list but their supervisor is not appreciative of their output.
WHAT PEOPLE NEED FROM THEIR WORK TO ENSURE THEY ARE MOTIVATED
Given that what people want from work is dependent on the organisational context, the situation, depending on the person, their needs and the rewards that are meaningful to them, there are a number of elements known from research about what people need to have in order to feed their motivation to work:
- We need to know we control our own work: by being allowed to have an influence on organisational decisions, by having clear and measurable goals; knowing that we are responsible for defining and completing key task and being recognised for achieving these goals.
- We want to be communicated with on both small and important matters in a timely way: including understanding the reasons for decisions made by managers; opportunities to participate in meetings and project opportunities and understanding where the organisation is and how our accomplishments meet those.
- We want to be given opportunities for personal growth and development: this includes training and development; clear career paths; being included in succession planning and experiential learning.
- We want our managers to lead us well: People want clear expectations that provide a picture of the outcomes desired with goal setting and feedback and an appropriate structure or framework.
INCENTIVES AND RECOGNITION FOR EMPLOYEE MOTIVATION
Why provide employee incentives?
It is said that engaged, motivated employees work harder, smarter and are more productive. A well structured employee incentive scheme can aid employee retention by engaging them and elevating their productivity and service levels to new heights but it can also help a business attract new employees by enhancing the brand image – engaged employees will talk positively about their workplace.
TYPES OF INCENTIVES COMMERCIALLY AVAILABLE INCLUDE:
- Supercheques or vouchers which can be cashed in at shops
- Landmark Awards designed especially for loyalty, long service and other special occasions.
- Money – pre-paid visa cards
- menu systems incorporating gift vouchers and gifts from categories such as food and drink, jewellery and watches, sports and leisure, photography, sound and vision and a comprehensive selection of lifestyle products.
- Technology products, such as ipads, iTunes cards
- Adrenalin-packed experiences such as Bungee jumping, helicopter and Warbird flights, Yacht, powerboat, RIB and Zapcat thrills or driving excitement in supercars, rally cars and off-road vehicles.
- Enhancing mind, body and soul: such as eco retreats, theatre breaks and casino experiences; Makeover treatments, spa days and detox therapies and popstar singing experience and Champagne tea at somewhere like Blenheim Palace.
DOWNSIDE FOR THE WINNERS
- Many incentives such as food negatively impact on health plans of employees and requests to stay and work on impact on health and well-being. Downside: ‘Why does my boss buy me chocolates as an incentive when I have just begun a health diet?’
- Others are innovative but with potential to fail?:
Here, no account is taken of those who do not drink alcohol for faith or any other reasons so this can be alienating. It can also exclude those who work part time, have a negative impact on health and maybe mean employees are over the limit when they drive home.
THE DON’TS OF EMPLOYEE INCENTIVE SCHEMES
CBS News reported on four ways in which incentive schemes can go wrong:
1. Don’t incentivize workers to do things they feel they cannot do. If staff are already working hard to sell the firm’s products but there is no improvement then a review of sales approach or a review of the commercial viability of the product has to take place rather than trying to incentivise staff to sell more. Goal: Sell more. Result: Salespeople look for new employment.
2. Don’t use incentive schemes to address problems managing poor performers. Sometimes there are situations at work where a few people are not behaving as expected. Rather than go to the offenders, management may set up an incentive scheme which aims to get everyone working in the required way but instead institutes new rules that negatively impacts upon everyone.
3. Don’t try and incentivize workers to do something that they believe violates their values. For example, rewarding doctors for seeing more patients de-professionalises doctors. Many see spending less time with patients to move them through a production process means not practising good medicine. Some may deliberately see fewer patients. Goal: Increase productivity (number of patients seen per doctor). Long term result: Lower productivity.
4. Don’t introduce an incentive plan as a way of getting an unpopular new strategy in. For example, if people have joined a company thinking they are doing one type of work where they can work in their home town then an incentive plan is introduced to do work on the other side of the world. Goal: work abroad. Result: No increase in working abroad and low motivation among the sales staff.
WAYS IN WHICH EMPLOYEE RECOGNITION CAN SUCCEED
Employee recognition should occur throughout the year.
Employee of the month recognition programmes can cause alienation and discontent for those who are working hard and are not being publicly rewarded. Everyone who contributed to a success should be rewarded. Example: one firm had a high turnover. The solution: Use non-cash forms of employee recognition to recruit and retain employees. Employees were rewarded for referrals of qualified employees who stayed more than three months. Daily recognition rewards were issued for being on time, for opening the store in the owner’s absence, and for outstanding customer service. Employee retention increased during the first six months. The owner’s store became identified locally as ‘the best place to work.’
Employee recognition approaches and content must also be consistent. … but not become expectations or entitlements.
Be as specific as you can in telling individuals exactly why they are receiving the recognition. .. specific feedback in employee recognition reinforces what you’d like to see the employee do more of.
Offer employee recognition as close to the event you are recognizing as possible. When a person performs positively, provide recognition and a thank you immediately to capitalise on the employee feeling good at that time and enhancing positive feelings and raising confidence.
Communicate the details of the incentive scheme…from the launch of the programme and throughout to the end.
Measure the results of employee incentives. for example, through increased performance.
Reward managers for providing a supportive environment.
WHEN EMPLOYEE INCENTIVES GO WRONG
Firms should always deliver on incentive promises. One motivated Hooters employee in America got less than she bargained for. She entered a competition to sell the most amount of beer to customers thinking she would get a new Toyota car, she won and was taken out to the car park to be presented with a Star Wars toy. She is currently suing her employer.
Watch out for employee playing games with the system
Most incentive plans involve numbers, increased numbers of sales, increased number of cars off the production line etc. All such production targets can be ‘gamed’, for example selling something on the grounds that it can be cancelled later or getting someone else to do the selling for you for a smaller bonus.
Incentives can discourage risk taking, creativity, and taking on challenges because the task is now just something that stands in the way of gaining the prize
Incentive schemes should not set employee up against each other and cause rifts in the workplace. Setting up employee competition can backfire and can rupture relationships by destroying trust.
Employee failure to win a reward can be demotivating and impact on performance.
How good employee recognition programs work – can your company do it?
- Employees work best if given concrete goals and objectives that they and their supervisors can both measure and manage. Clear, understandable criteria for recognition are important.
- Generation theory and life cycle theory warns us that we need to understand what motivates each employee. What motivates a Gen Y student part-timer struggling with tuition fees isn’t what a full-time career track Baby boomer store manager or line manager views as recognition (See the CIPD/Penna research ‘Gen Up’).
- Good employee recognition programs allow for many winners.
- Successful recognition awards are often individual surprises rather than multiple awards saved for an announced event. Instead of employees focusing on winning an award, they are focused on just doing well at their jobs.
- All employees at all levels should be recognized for good work, including supervisors and managers.
- Effective programmes don’t have to be elaborate and complicated to operate successfully. Once criteria are set and recognition awards match employee values, administration can and should be simple.
- Versatile recognition programs include tangible and intangible awards for all types of employee successes, from concrete and visible contributions to subtle influences on the company’s successes.
- To be effective, acts of employee recognition should come from the managers who hire, fire, appraise, coach, and correct employees on a daily basis. Recognition programs can’t be left to top executives at boring monthly meetings.
- Top executives who offer simple, verbal expressions of gratitude are recognizing employee performance with as much impact as physical rewards offer.
OFTEN OVERLOOKED RECOGNITION OPPORTUNITIES
Here are examples of five often-overlooked recognition opportunities:
- Relationships. Recognise customer relationship building as well as customer sales. Building strong relationships with prospective clients can lead to future sales, ongoing business development, and client retention when they do close the deal.
- Teamwork. Don’t overlook hidden “stars” within your support staff. Ignoring the people who helped sales is a clear way to make team players feel underappreciated and become resentful.
- Effort. Recognise frequency of sales as well as major amounts. Not every new account brings in the kind of revenue that extremely large accounts do. Yet it takes just as much effort, if not more, to close many smaller accounts, and juggling multiple accounts is also time consuming.
- Opening Doors. Recognise and/or rewarding the person who opened the door in the first place to avoid feelings of resentment that their time and effort wasn’t appreciated. Sometimes a sales visit doesn’t lead to a sale for your particular department, but maybe it opens a door for someone in a different department of your company and leads to them making a sale.
- Loyalty. Recognise someone’s ability to retain clients to encourage behaviour changes that will benefit your entire organization. Whilst bringing in new business is often rewarded, staff are rarely praised for retaining clients. Many employees, in customer service, administration and accounts who work hard every day, often going the extra mile or two, just to keep those existing customers happy.
INCENTIVISATION LINKS TO STAFF RETENTION
It can cost two to three times more to replace a worker than to retain the employee. For example, Taco Bell found that 20% of the stores with the lowest turnover rates enjoy double the sales and 55% higher profits than the 20% of stores with the highest employee turnover rates.
Employee recognition is a thank you for doing something that benefits the goals of the organisation.
Employee of the Month programs can fail because it is exclusive and often the same people win over and over again.
What do you incentivise? Long service or good performance?
SIX ELEMENTS FOR SUCCESSFUL IMPLEMENTATION OF AN EMPLOYEE INCENTIVE PROGRAMME
There are six elements said to make a successful implementation of an employee incentive programme:
- Have clear objectives about what you are trying to achieve.
- Draw up a budget for short and medium term.
- Allocate responsibilities for the scheme.
- Decide who the incentive scheme is aimed at.
- Allocate timesales for start and end date of the scheme so that participants know how long they have to achieve their goals.
- Decide on which incentives are to be used.
THE BEST INCENTIVE A MANAGER CAN OFFER THEIR STAFF IS TO SAY THANK YOU… OFTEN. SUCH ‘SMALL MOMENTS’ CAN MEAN SO MUCH.
It also doesn’t harm to give an award but the research suggests don’t make this reward too large or something that will take employees away from what they should be doing and engaging in gaming instead. People like to receive medals and trophies as they have lasting meaning. Look at the Olympic athletes!
Kohn, Alfie ‘Punished by Rewards’. Mariner books http://www.amazon.com/dp/0618001816/ref=rdr_ext_tmb